State-of-trade survey confirms continuing market improvement
Business is continuing to improve for members of the Building & Engineering Services Association, with increased order books and enquiries being reported more or less across the board — according to the latest state-of-trade research carried out among the membership. The survey covers the first six months of this year (January to June 2014) and also reveals growing confidence in future commercial prospects.
56% of respondents indicated that they were positive about future prospects, resulting in the ‘net optimism’ measured rising to +49%, compared to +35% for the previous survey.
Twice as many respondents reported an increase in their order books — 58%. Nearly half had experienced higher enquiry levels.
Improved trading conditions are reflected by a welcome stabilisation in tender prices, but also by an increase in labour costs as skills shortages begin to bite again. Rises in material costs, however, were less evident than at the start of the year.
Geographically, more companies in East Anglia, East Midlands and the south west of England reported improvements in business levels than in other regions. Only in Northern Ireland did firms record a decline in enquiries and recruitment, along with static order books and turnover.
In terms of market sectors, firms active in services and facilities and industrial/commercial installation saw the biggest improvement.
38% of respondents confirmed that they were employing more people than six months earlier. 44% expected to recruit during the second half of 2014. The use of agency labour also rose significantly — as did the number of firms hiring apprentices or trainees, up by over 20%.
Chief executive Roderick Pettigrew points out that this was the third successive B&ES survey to show a brightening picture for building engineering services.
He said, ‘With enquiries, order books and turnover all on an upward trend, our members are beginning to credit that a sustained and increasingly robust recovery may genuinely be on its way.’ He observed that the reported stabilisation of tender prices augured well for future profitability.
‘I am also pleased to note that our members are recruiting again, most significantly at apprentice and trainee level, especially in the light of the skills shortages that are already beginning to appear in many areas of the workforce.’
The research was undertaken by independent consultant Lychgate Projects. The full report is available on the B&ES web site.